Woodside (ASX:WDS) has demonstrated its ability to remain a steadfast value prop in the eyes of its investors (loyalty from existing shareholders obviously a given) with the company climbing higher on its Tuesday earnings report – despite weaker oil prices driving a -25% drop in profit.
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That Woodside, the southern hemisphere’s largest oil and gas company after a Brazilian goliath, remains a blue-chip favourite isn’t surprising. The EV revolution hasn’t exactly been a revolution for the energy industry yet, just a pain point, and while oil prices might be one thing, Woodside is increasingly a gas giant.
That, perhaps, means more to Australians, where the gas energy transition has become a staple term that might raise eyebrows in more ESG-conscious places like some parts of Europe (the Netherlands more than Poland, to be sure).
So it was that the company reported profits after tax of $2.71 billion, down -24% vs pcp. That being due to lower realised prices; in the context of Woodside’s report being for the full year CY25 that tracks – through CY24, the Brent crude price was higher at some points throughout the year.
(Fun fact: CY24 was more or less the last time we saw Brent prices above US$80/bbl, if you ignore one last spike in mid-January CY25.)
Looking at fundamentals, Woodside did have strong points to offset what concerns might stem from a profit drop. Production in CY25 hit record highs above internal expectations (let’s just trust they weren’t strategic lowballs) thanks to Sangomar, and unit production cost increased -4% to $7.80/bbl equivalent.
Also on the radar is the company’s new Louisiana LNG Project, which was greenlit by a positive FID – so there’s still big money-making assets coming online for Woodside, and under Trump 2.0, especially, America’s need for LNG is an easy value prop to make. That’s set to start pushing out in CY29, and in the meantime, the Trion project is expected to produce first oil in CY29.
Woodside even managed to technically drop emissions by 15% “below the starting base”, but it did this using carbon credits, which, if you aren’t a deliberately obtuse climate change denialist, are obviously a fairly cynical instrument to achieve real change. But this finance journalist doubts it weighed on many investment decisions.
As for Australia, the controversial Scarborough project is set to produce its first LNG cargo this year. And Woodside does continue to plug away with what it’s perhaps best known for in Western Australia, depending on who you’re asking: Exploratory deep-sea drilling in the middle of whale season.
WDS last traded at $27.42/sh.
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